In the 1950, Americans literally did not see the poverty which existed in what was commonly—but wrongly—thought to be an “affluent society.” In part, that was a result of a new sociology of vision caused by large numbers of people moving to the suburbs and losing contact with the poor who, in great numbers, remained in the central cities. It was, then, a shock to discover the misery that persisted on either side of the federally subsidized highways that led from the office to the new homes on the urban periphery.
In the 1980s that sociological trend continues apace. The cities are, more than ever before, warehouses for those who have been left behind by progress, many of them black, a fair number “undocumented” and working in the renascent sweatshops of the computer age. But the media have, on the whole, done an excellent job of keeping the images of suffering before the people. The Wall Street Journal has published some of the finest reportage in this area, and television has regularly visited the soup kitchens and dying mill towns. And yet, there is still great confusion about poverty, even a tendency for “informed” opinion to say that it has been greatly exaggerated.
The problem today is not one of immediate vision but rather of how to interpret what the eyes—or the media—see. Today it is not so much the social-geographical structure of the society but sophisticated theories, often buttressed with impressive statistics and charts, that convince us that we are not really seeing what in fact we see. It was with considerable reluctance that I really tried, in The New American Poverty (Holt, Rinehart and Winston, $17.95, 271 pp.), to draw a map of the statistical maze. I would have preferred simply to describe ghettoes, slums, and the depressed backwood.
The debate over the theories and the numbers goes on, as three new books make quite clear: The New Politics of Inequality by Thomas Byrne Edsall (Norton $15.95, 288 pp.), Losing Ground by Charles Murray (Basic Books, $23.95, 323 pp.), and America’s Hidden Success by John E. Schwarz (Norton, $12.95, 208 pp.). I do not propose to “review” them, but rather to use them to explore some of the central themes in the current discussion. Edsall and Schwarz I find quite useful, even though both have flaws. Murray, however, is a perfect example of the current problem, a seemingly well-documented, actually tendentious study in which an apparent objectivity is the facade for a sweeping, reactionary program which could do serious harm to the poor.
First, there is the famous debate concerning the overestimation of poverty as a result of the failure to include the cash value of in-kind goods and services (food stamps, Medicaid) received by the poor when the extent of poverty is estimated.
I will not tarry long over this argument since it has been around for about a decade, and I have documented my critique of it in my new book. It is absolutely true that a serious definition of poverty must take into account the extent of a possible overcount as a result of the value of those goods and services. But how, exactly, does one “cash in” those programs? Take one example of this problem.
About 40 percent of Medicaid services goes to aging paupers in nursing homes, i.e., it is terminal care for people ending their lives in poverty. If the medical problems of such people are severe enough, they can statistically ascend into the middle class. But should thee funds thus disbursed—and we are speaking of the most costly single in-kind service—be conceptually allocated to the entire poverty population? And isn’t this a form of “income” that everyone of us hopes we will never receive?
The overcount thesis carefully scrutinizes every possibility that we have exaggerated the extent of poverty. And it just as carefully ignores considerable evidence that we have underestimated it. The tough-minded, critical spirit, it would seem, moves in only one, rather value-laden, direction, even though it decks itself out in the trappings of scholarly impartiality. You will not, for instance, find these researchers worrying about the carefully developed case made by Molly Orshansky, the woman who defined the poverty line in the first place, that our numbers, for a variety of technical reasons, significantly understate the number of the poor. Nor is there any attempt to estimate the number of the undocumented poor who may well have escaped the statistician’s net.
Strangely enough, there is a liberal, as well as a conservative, rationale for this procedure. Indeed, one of the first statements of this thesis was made by the Congressional Budget Office when it was under the direction of a Brookings economist, Alice Rivlin. For the right, the overcount proves that we have been throwing money at a nonproblem and is one more reason for cutting back on the spending. For the left—and this is the most serious flaw in Schwarz’s otherwise very useful book—it is cited to show that the liberal programs of the sixties really worked.
Those programs did work even though, in Pat Moynihan’s phrase, they were “oversold and underfinanced,” and it is Schwarz’s virtue to document in detail the fact; this, in short, is the “hidden success” that supplies his study with its rifle. The problem is, however, that a new poverty began to appear in the early seventies which has become even more deeply rooted in our society in the past five or six years.
This is a major factual point on which Charles Murray and I agree. But Murray’s book explains that persistence of poverty by arguing that it was, and is, a consequence of a misguided War on Poverty. In the sixties, he says, we altered the motivations for working by increasing Aid to Families with Dependent Children (AFDC), initiating a food stamp program which provided some help for the working poor, and by coddling criminals and thus providing incentives for the poor to turn to the underworld rather than the labor market. As a result, in 1968 the “rules governing the labor market” had been so radically changed that the generation of poor blacks turning eighteen was motivated to shun work. This, Murray holds, is the cause of the new poverty.
First, credit where credit is due. Murray’s concept of “latent poverty” is quite handy. He tracks the number of Americans who would be poor were it not for government transfers. This gives us, so to speak, the Adam Smith component of poverty, the “natural” outcome of the economy. It is considerably higher than the official poverty count which is based on numbers calculated after the cash-based welfare and Social Security programs (as distinguished from the in-kind benefits) are taken into account. Latent poverty, Murray asserts, has been rising for over a decade. Right.
One consequence of this turn of events, and here again I agree, is that “the poverty-reduction power of economic growth diminished sharply at the turn of the 1970s.” Why? Here we come to a fundamental disagreement, and a conviction on my part that Murray’s book is inexcusably tendentious and uni-causal. Underlying all of Murray’s profoundly flawed empirical arguments is an equally flawed premise about human behavior: that the poor are motivated solely by a sophisticated cost-benefit analysis of the relative value of work as against welfare. The problem is, every time halfway decent jobs are offered in the United States today, hundreds, sometimes thousands, of the poor will wait in the rain, and even fight with one another, for the chance to get, not the job itself, but just an application for the job.
Let me, however, be more than anecdotal in my critique. I should note that Murray only cites evidence of the failures of the programs of the sixties. His figures on the failure of all manpower programs in that decade as well as the seventies are ably contravened by the evidence in Schwarz’s America’s Hidden Success. The point is not central to Murray’s basic theme, but it is one more illustration of how polemical his book is.
More seriously, Murray argues that AFDC benefits motivated poor people to take themselves out of the labor market. Now there is no doubt that there are irrational and harmful effects of this program, particularly in those states where AFDC is not available when there is an unemployed, but employable, parent in the home. But the real problem is that Murray bases his theories on an AFDC that does not exist.
Rudolph Penner, the conservative (American Enterprise Institute) economist who now heads the Congressional Budget Office (CBO) testified last year before a Ways and Means subcommittee that AFDC “guarantees have declined in real terms since at least 1969 and, in proportion to the poverty lines, the AFDC guarantee levels plus food stamps benefits are in all cases below the federal minimum guarantee for couples receiving SSI [Supplemental Security Income].” But how does the declining real value, not simply of AFDC, but of AFDC plus food stamps, motivate the poor not to look for a job?
Secondly, Murray seems unaware of the evidence that, as David Stockman put it before Congress, “most families’ stays on the AFDC rolls are relatively short.” Only 15 percent of AFDC participants are in the program for more than eight years; 47 percent leave within two years.
And the main reason that women with children go to AFDC is not that they have lost work motivation, but that a man has walked out on them. It is also not true, as Murray clearly implies, that having babies is a “rational” choice made by a poor woman in order to avoid work. The average AFDC family size is about the same as the average American family size.
Finally, Murray cites a book by Frances Fox Piven and Richard Cloward to show that the National Welfare Rights Organization was a major force in getting poor people to fight for “the right for long-term, unfettered, generous charity.” He does not cite a later volume by the same authors which shows that NWRO never organized more than a small fraction of the welfare mothers.
Food stamps are attacked by Murray on the ground that they corrupted the working poor: “Pride in independence was compromised and with it a certain degree of pressure on the younger generation to make good on the family tradition.” In this case, we do not have to speculate. The Reagan administration gave billions in tax welfare to the very rich but took away food stamp and Medicaid eligibility from the working poor. At the time, there were many who thought that this latter action would be a work disincentive, motivating people to turn to welfare now that their in-kind income had been lowered. Reagan’s action, was, no mistake about it, mean, and caused human suffering. But the evidence is that there was no significant move away from work to welfare. The Protestant ethic, it turns out, survived the harrowing experience of having a little extra food.
Crime, Murray says, was made an attractive alternative to work by the new rights accorded prisoners, and sentencing policies which drastically lowered the probability of going to prison. Indeed, Murray even waxes nostalgic about the good old days when poor people were “taken into an interrogation room and questioned without benefit of counsel.” Alas, he notes, ” by 1970, the poor person had acquired an array of protections and stratagems that were formerly denied him … . ” This was an increase in equality before the law (good, says Murray) and an incentive to crime rather than work (bad).
There are so many one-sided arguments in this portion of the book that I can only advise the reader to turn to Charles W. Silberman’s Criminal Violence, Criminal Justice, a volume which literally explodes Murray’s stereotypes. Silberman quotes a wide range of studies from different points of view to show that the ratio of incarcerations to arrests in the 1920s was less than under the Warren Court. There was, and is, a statistical illusion that the opposite is the case, but presumably Murray’s street-wise calculators would determine their choices on the basis of their real world rather than referring to the Uniform Crime Report of the FBI.
Finally, Murray’s most startling single error has to do with blacks’ participation in the labor force. There was, he holds, a pronounced tendency for blacks to remove themselves from the labor market at precisely that point in time—1968—when the misguided job disincentives were put into practice. First the anti-poverty laws, then the flight from the work force. Post hog ergo propter hoc. But Murray’s error consists in more than a dubious leap of logic. Consider something else. At one point in his discussion of the tremendous increase in people receiving disability payments under a program initiated by President Eisenhower in the fifties, Murray quotes (in a footnote) a definition from an article by Donald Parsons in the American Economic Review (December, 1980).
The reader may well wonder why I point so emphatically to a mere footnote. The reason is that Parsons’s article, cited by Murray on a technical matter, contains material which undermines Murray’s basic argument. A large number of black males, Parsons argues, did indeed leave the labor force, but the trend started, not in 1968, but in the fifties when disabled workers were given the right to benefits. But why did blacks respond more than whites? For two reasons, which Parsons documents. First, physical disabilities were more prevelant among blacks than whites; second, the concentration of black workers in poverty jobs meant that they had less to lose in trying to get in a program that had a relatively high rejection rate.
If, Parsons concluded, one statistically “controls” for these health and economic factors, there is then no “systematic difference in behavior between the two racial groups.” Misery, including physical infirmity, explains much of the trend—not “coddling” by sixties welfare programs, Indeed, Murray himself cites the effect of this process—the increase in the number of disability beneficiaries from 687,000 in 1960 to 4,352,000 in 1975—without inquiring into how this affects his other numbers.
But isn’t it possible that those disabled workers were malingering, and that Murray is right on the essential thesis—that generous social programs provided work disincentives—while merely wrong on the name of the program? Not quite. Parsons pursued that possibility and discovered that those with lower labor force participation rates because of this program tended to die early. And we know that the savage Reaganite attack on the disabled—half a million were lopped off the roles—was so unfair that some U.S. attorneys appointed by the Reagan administration itself refused to prosecute the cases. Congress has since put a stop to the whole vile process.
Does this mean that the disability program alone explains the existence of a new and persisting poverty? Of course not. The threat of poverty now faced by industrial workers and their communities is a result of a technological revolution and the transformation of the international division of labor. The “feminization” of poverty—particularly the percentage increase in the number of younger women among the adult poor—is cultural and even spiritual in origin as well as economic, and so is the epidemic of teenage pregnancy. The decline of the traditional family and sexual morality has roots in the changing nature of urban life, the inferior position of women in the occupational structure, and a breakdown of family which is not accounted for by simply citing those “material” causes. Needless to say, all of these complications utterly elude Murray’s monochromatic, flawed thesis.
Murray’s case, then, falls when scrutinized critically. And his conclusions point to doing away with AFDC, food stamps, and almost the entire welfare state (he even seems’ to be hostile to help for the retarded, the learning-disabled, and the emotionally disturbed) in order to end what he alleges to be the corruption of the poor. The alternatives? Among others, the generosity of local communities in dealing with such problems. Perhaps Murray might interview a “deinstitutionalized” mental patient who was rightly discharged from an inhuman asylum, then wrongly turned over to the tender mercies of the local communities.
Alas, there seems to be a market for such statistical and scholarly meanness these days. And it affects our politics, as Thomas Edsall reminds us in The New Politics of lnequality.
There are many fascinating aspects of Edsall’s analysis and I even have some disagreements with him that would be important in other contexts (“class skewed voting” is not, to my mind, a recent development, but one which Reagan has made particularly obvious; in computing the impact of taxes, the high nominal rates paid by the rich in the past are to be taken with a handful of salt). But what is critical, to my mind, is the way in which Edsall deals with the political impact of the tax burden. Bracket creep, the increase in the Social Security tax base (which hits at the middle class but not the rich), and a host of other tax factors have convinced a good many working- and middle-class Americans that they pay too much for welfare programs for the poor.
It is this phenomenon, Edsall warns, that could transform the Democratic party into a minority formation, not the least because its poverty and working-class constituencies vote so much less than Reagan’s upper-class and rich constituency. But the truly critical element is the political battle for the middle of the society. These are the people who believe that they are over-taxed and pay a disproportionate percentage of the cost of welfare. They are right on both counts.
But those working- and middle-class people draw a completely erroneous conclusion from their justified anger: that since they pay “too much” for the poor, the poor are to blame. But that is not the case at all. The poor, in general, receive less in the United States than in any other Western industrial democracy and, as we have seen, their real living standard declined throughout the seventies and the eighties, The villain in the piece is not to be found in the poor—who lost more in cash income than any other group during the last four years—but in the rich who so successfully avoid paying their fair share.
That trend pre-dated Ronald Reagan and existed under Democratic administrations, but Reagan has clearly made the very worst of a bad situation. He did not simply give away billions to the wealthy; he actually increased the federal tax burden of the poor. And the people in the middle made no gains—the second quintile from the bottom suffered a net income loss, the third a slight gain, the top quintile went up by a hefty percentage—which is usual. The point is, the political strategy for a renewed assault on poverty cannot be predicated on the assumption that the “affluent” middle is going to exercise noblesse oblige toward those suffering at the bottom. The middle isn’t affluent and any effective strategy has to be based on taking welfare away from the rich rather than raising the taxes of the middle.
This is critically important to grasp right now given the fact that indeed there is going to be a great debate on taxation next year. If the Democratic party buys some version of a modified “flat tax,” i.e., if it abandons the principle, so often honored in the breach, of progressive federal taxation, that will not simply be a blow to equity. It will also be a way of digging a political grave for the Democratic presidential party. In this context, if Ronald Reagan has followed a class-biased policy, as Thomas Edsall so thoroughly documents, then the Democrats will have to be at least as class conscious as the Republicans are.
Strangely enough, I not disheartened, not even by an election which Ronald Reagan appears likely to win. To be sure, I am profoundly disturbed by the new ideological and statistical attack on the poor. I am willing to grant that Murray’s heart is in the right place, but the fact remains that he has provided a sophisticated, profoundly flawed, rationale for Scrooge. Schwarz and Edsall are part of an intellectual counterattack, but there is an enormous amount of work to be done in rescuing the poor from their “objective” tormentors. Most importantly, I am convinced that Reagan’s sand castle recovery, as economically and politically real as it is fragile, will crumble sooner or later. And at that point, more and more people in this society are going to learn that the poor are, and were, the fast victims of macro-economic trends which threaten us all.
I would hope we will turn to the poor out of a sense of justice and compassion. We should not forget, however, that it is in the common interest of the entire society to put an end to this needless, and now revitalized, misery.
